First quarter of 2020

The covid-19 pandemic has had a devastating effect on the share price of property companies, with 31% wiped off the value of their total market capitalisation during the first quarter of 2020.

Grainger

Acceleration to scale; NTA premium pricing this

Grainger

AGM statement – good start to the year

Grainger

10% premium to NTA pricing in near-term outlook

Grainger

Acquisition in Cardiff for £57m; 7% gross yield

Another acquisition in East London; PT upgrade

Grainger has announced another forward-funded acquisition within Canning Town, this time a 132-home PRS development in Hallsville Quarter for ~£55m (5.5% gross yield), complementing its existing PRS developments in this area (Argo Apartments, Hallsville Quarter phase 1). We leave our forecasts are unchanged (not updated post yesterday’s prelims), but upgrade our PT from 290p to 305p, pricing the shares at a ~10% premium to EPRA Net Tangible Assets. Buy.

FY19 prelims – earnings 3% ahead of consensus

FY19 prelims have come in line. Key highlights include: NRI ~3% below our forecasts, but offset by disposal profits being ~6% ahead, resulting in an adj. op. profit beat of 3.4% . Adj. PBT was in line with our estimates, and 3% ahead of BB cons. EPRA NNNAV grew 1% LFL to 272p (post rights-issue). With the shares up 33% YTD, and tracking close to our 290p PT (unchanged), we acknowledge the shares are up with events. However, we leave our Buy stance unchanged noting the potential that exists for t

Planning application submitted for Lewisham development

Grainger has confirmed that a detailed planning application to develop on Besson Street (New Cross Gate, Lewisham) has now been submitted as part of its 50/50 JV with the London Borough of Lewisham. The scheme will include 324 new homes (35% affordable), as well as 5,000 sq. ft of amenity space. Subject to planning permission, construction is expected to start in April 2021 with completion anticipated for April 2024. We make no changes to our forecasts and leave our Buy rec unchanged, noting tha

Earnings rebased ~7%/9% for FY20/21e; more conservative stance taken

We update our forecasts for Grainger following the Sept trading update and CMD, revising down our net rental income estimates by ~8%/10% for FY20/21e taking a more conservative view over the lag between passing rents vs. NRI materialised. As a result our adj. PBT estimates fall by ~7%/9% for FY20/21e, which moves us from the top-end of consensus to the middle of the range. We retain our Buy rec and 290p PT, seeing moderate upside (~8%) at current levels noting the recent bounce in the shares ove

Quarterly Research Outlook Autumn 2019

Following continued delays of a Brexit agreement, few sectors within the UK market have remained attractive to investors despite low valuations. One sector which has continued to outperform despite the political drama has been the UK video gaming sector (henceforth UK gaming), which we are fans of. We believe a combination of sector-leading growth, strong cash conversion and timely cyclical positioning support our positive view on the UK video gaming sector.

£42m acquisition generates scale in Sheffield

Grainger has announced a £42m forward-funded acquisition of a 284- home PRS development in Sheffield (gross yield ~7% on cost), complementing its existing presence in the region. We make no forecast changes at this stage, and with the shares trading at a ~13% discount to our FY20e EPRA NNNAV, we continue to believe this undervalues the company’s sector-leading positioning in the PRS market, reiterating our Buy rating.

Trading update shows good rental growth, leasing ahead of expectations, new acquisition

Grainger has released a trading update to the end of August reporting LFL rental growth of 3.4% (ahead of our forecasted 3% for FY19e), leasing ahead of expectations at its new schemes in Bristol, Manchester & Hampshire, and a complimentary acquisition also in Bristol. We leave our forecasts unchanged at this stage, though we note we are ahead of consensus for FY20 and reiterate our Buy recommendation seeing value at current levels.

Quarterly Research Outlook - Summer 2019

In January, we provided a list of 11 stocks for 2019 that we believed would perform strongly with attractive catalysts that could lead to material outperformance. In this Quarterly Research Outlook, we revisit these views, analysing what has happened and how the remaining six months of the year could play out.

Update to £34m forward funded acquisition in Leeds

Grainger has announced that construction has now commenced at its 216-home PRS development in Leeds, which is being forward funded for £34m. The scheme (known as Fabrik) is anticipated to generate gross yield on cost in excess of 6.5% once stabilised, with completion anticipated for late 2021. We highlight the fact that this development builds on Grainger’s existing presence in Leeds (complimenting its 242-home Yorkshire Post development, also anticipated to complete in 2021) giving the company

Earnings rebased 16-22% post interims; maintain strong Buy

Following the interims last week, we rebase our earnings by 15.8% for FY19E and 21% - 22% for FY20-21E to reflect disposal profits in H1 19 being lower than expected, and updated assumptions on net rental income post the interims. We make other small changes (explained below) which repositions EPRA NNNAV from 287p to 283p in FY19E and from 306p to 299p in FY20E. Though we move from the top-end to the middle of consensus earnings, we remain buyers of Grainger seeing significant scope for a re-rat

The dark side of interest rate hikes

While the management reiterated its full-year guidance, the third quarter results confirmed that interest rate increases also have a negative side in the form of negative equity adjustments and a looming asset quality deterioration.

Cenkos: Agronomics Ltd -- First FDA Pre-Market Consultation

The FDA has announced it has completed the first pre-market consultation for a food product made from cultured animal cells. The submission, made by Upside Foods, and FDA response means that the agency accepts Upside's data package and conclusion that its cultivated chicken product is safe to eat. This clearly represents a significant achievement for Upside Foods and a major milestone for the cultivated meat sector in general, marking the first significant regulatory milestone in a major jurisdi

Cenkos: Duke Royalty Ltd -- A New Half and a New Path

Duke has released a resilient set of interim results and a Q3/23E trading update and remains on track to hit our full-year estimates. H1/23A recurring cash revenues were up 67% YoY, and Q3/23E should see a further 4% increase. The Group has a further c£15m of liquidity to deploy following the equity raise earlier this year and the recent investment in a new partner called New Path Fire and Security. We believe deployment will be higher in the second half than the first. The business model contin

Cenkos: Marlowe Plc - Solid H1/23E results

Marlowe has released a robust set of H1/23E results, with strong organic growth (+8% YoY), improved Adj EBITDA margins (+100bps YoY to 18.8%), and confirmation that it is trading “slightly ahead” of expectations for full year Adj EBITDA. We nudge up our FY23E Adj EBITDA by £1m to £82m, leave FY24E Adj EBITDA unchanged (at £93m), but lower Adj Diluted EPS in both years (by 9% and 11% respectively), primarily to account for higher interest rates on increased borrowings (used to fund recent M&A). D

Equals Group (EQLS LN) - Santa rally update

Equals Group’s trading update to 30 November 2022, leads the Board to conclude that Equals’ full year results to be ahead of current market expectations.

Equals Group (EQLS LN) - Roqqetting revenue growth

After reporting “record breaking revenues”, strong growth in operational cashflow, the group acquired the minority interest in Equals Connect, its fast growing white-label business, and Roqqett, an open banking platform that will enable Equals create new revenue streams (Roqqett details: see pages 16-17).

SHORE CAPITAL - H&T Group+ (HAT) House Stock, 485p

Hybridan Small Cap Feast 23/11/2022

Dish of the day Joiners: No joiners today. Leavers: No leavers today. What’s cooking in the IPO kitchen?** Kistos Holdings plc, intends to join AIM. The Company was incorporated to act as a new holding company for the group companies 0f Kistos plc (KIST), a holding company with the objective of creating value for its investors through the acquisition and management of companies or businesses in the energy sector. Anticipated Market Cap £327m. Expected 22 Dec 2022. AT85 Global Mid-Market Infrastr

​Europe’s largest lithium hydroxide refinery is Go!

Alkemy’s 100%-owned subsidiary Tees Valley Lithium (TVL) has received full planning permission to build its planned world-class, low carbon, lithium hydroxide refining facility at the Wilton International Chemical Park in the Teesside Freeport, UK. Our indicative valuation increases to 1228p/sh (£12.28/sh) from 614p/sh previously. Details in the note...

Palace Capital* - 1HFY23 results – under pressure

Palace Capital has released interim results to the end of September reporting adjusted profit before tax of £3.5m (1HFY22 £4.0m) and adjusted EPS of 7.9p (1HFY22 8.7p), mainly reflecting rising financing costs. The dividend was maintained at the current quarterly run rate of 3.75p and net debt was held broadly flat. EPRA NTA per share fell 8.7% to 356p. The sale of the industrial portfolio remains paused but smaller commercial sales continue together with the sale of apartments at Hudson Quarter

LIBERUM: NewRiver* - Operational momentum driving earnings growth despite macro challenges

Industrial property market - What the logistics is going on?

If one looks through the current interest rate cycle and trusts that inflation will be brought under control at some point within an investable timescale, then the hope is that as the cost of capital reduces real estate values will rise again. Our worst-case scenario of a 200bps move in yields and no rental growth would see valuations fall by a third. Many of the discounts that industrial and logistics property companies are trading on are currently wider than this. Couple this with the strong o

Ongoing Asian refocusing

The disposal of the Canadian operations makes sense not only from an industrial and a financial standpoint, but also geopolitically. The divestment and the likely reinvestment of a portion of the proceeds in Asia will please Ping An, even if it does not meet its request of making the Chinese operations Western-sanctions proof.

SHORE CAPITAL - NewRiver REIT+ (NRR, House Stock at 72p)

LIBERUM: Speedy Hire* - On track for progress this year